PetroChina buys stake in Canadian shale gas field

December 15, 2012 - 11:00 AMT

PanARMENIAN.Net - Chinese oil group PetroChina is buying a stake in a big Canadian shale gas field for $2.2bn, highlighting Chinese energy companies' growing interest in Canadian resources after the $18bn Cnooc-Nexen deal, CNN reports.

PetroChina, China's biggest oil company by production, will form a joint venture with Encana of Canada that gives the Chinese company a 49.9 per cent stake in Encana's Duvernay lands project in Alberta, an area that contains shale oil and shale gas.

It is the second big overseas deal by PetroChina this week, following its $1.6bn investment in the Browse natural gas project in Western Australia on Wednesday.

China's state-owned oil companies have a mandate to expand their overseas operations at a time when China's oil and gas imports are surging to meet growing domestic demand.

Canada has been a magnet for Chinese energy investment thanks to its rich resources, open foreign investment climate and stable regulatory environment.

The Canadian approval sent a reassuring signal to investors about the country's openness to foreign takeovers.

However, Stephen Harper, Canada's prime minister, also set out a new policy on acquisitions by foreign state-controlled companies such as PetroChina and Cnooc, which puts new obstacles in the path of such deals, and bans them altogether in the oil sands of western Canada.

The Nexen takeover should not be seen as "the beginning of a trend, but rather the end of a trend", Harper said.

"To be blunt, Canadians have not spent years reducing the ownership of sectors of the economy by our own governments, only to see them bought and controlled by foreign governments instead."